Billionaire investor supports Virgin Money in RBS bid
US billionaire investor, Wilbur Ross, has invested £100 million in Sir Richard Branson’s Virgin Money in order to help it in its quest to bid for Royal Bank of Scotland’s (RBS) High Street branch network, believed to be worth up to £2 billion ($3 billion).
RBS, which is 84% state-owned, was ordered by European Union antitrust regulators to sell a number of assets, including its High Street chain and insurance division.
Other possible bidders for the branches include Spanish banking giant, Santander, and National Australia Bank.
Meanwhile, Virgin Money could not be reached for comment but it is expected to make a formal announcement tomorrow morning that it is teaming up with Mr Ross.
Mr Ross, whose business interests include steel, oil and banking, told the Reuters news agency: “The UK banking system is clearly going to go through a big overhaul.
“There will equally clearly be some new winners and some new losers. We think that, given the management team and the reputation that Virgin Money has built up, they are ideally positioned to be one of the big winners,” he added.
This is not the first time Mr Ross and Virgin have worked together, they teamed up together in an attempt, albeit unsuccessful, to buy Northern Rock in 2007.
Virgin Money , which is set to launch as a retail bank later this year, recently acquired regional bank Church House Trust.
It already offers savings, credit card and investment products to around 2.5 million customers.
The launch of Virgin Money comes at a time when consumers have lost confidence in existing High Street banks following the financial crisis and Sir Richard wants to take advantage of this, giving Virgin the opportunity to quickly gain a share of the market.
Meanwhile, Virgin Money is understood to be interested in other acquisitions in the banking sector but according to Mr Ross, the RBS branch network is “the only one on offer right now”.
“We’re working with them [Virgin] on the due diligence and we’re working with them on the bid preparation, so it’s not just a blank check,” said Ross.